NHS doctors back private hospitals plan
· Businessman leads £100m venture for centres of excellence
for operations
· Hundreds of consultants sign up to be joint owners in
'patient choice' scheme
John Carvel, social affairs editor
Guardian, Monday October 3, 2005
A healthcare entrepreneur has raised more than £100m from
the City to kickstart plans to build a chain of private
hospitals across England in partnership with hundreds of
frustrated NHS consultants.
The venture, probably the biggest private investment in
hospital construction since the NHS was founded in 1948, has
been triggered by the government's plans for patient choice,
identified by Tony Blair in his speech to the Labour
conference as the big theme of his third term.
From 2008 people needing an operation will be entitled to
select any hospital - public or private - that can work
within NHS cost limits. The treatment will remain free for
the patient and the hospital will be reimbursed by the taxpayer.
Iranian-born Ali Parsa, a former merchant banker with
Goldman Sachs, is planning to build a network of health
campuses across England. Each will have a state-of-the-art
hospital, surrounded by other healthcare facilities such as
GP and dental surgeries, pharmacies and gyms.
Centres of Clinical Excellence, the group he chairs, has
been set up as a venture in which doctors, nurses and other
professionals will share in the management - and the
profits. Mr Parsa, 40, sees it as a medical equivalent of
the co-ownership model used in retailing by the John Lewis
Partnership. He did not intend to announce the scheme before
planning applications to build the first hospitals are
submitted over the next two months. But, when approached by
the Guardian, he gave an outline of his intentions.
He said he already had all the backing he needs to launch
the venture. The sum "significantly exceeds £100m" and
further injections of money are possible. "We wish to act as
a conduit for the City to invest in UK healthcare. One of
our investors is a multibillion pound institution."
The company has had informal contact with the Department of
Health, but its progress does not depend on winning national
contracts from the government.
Patricia Hewitt, the health secretary, told the Labour
conference that the contracts she intends to sign with
independent treatment centres will bring them no more than
10% of the market for elective surgery. But she could not
commit the government to making 10% a permanent ceiling for
the private sector because she did not know how patient
choice would work after 2008. The size of the private sector
will be determined by competition, not Ms Hewitt.
Mr Parsa's backers clearly expect many people will prefer
his purpose-built facilities to the NHS. He thinks some
patients may come as individuals, others as a result of
joint ventures with NHS trusts that decide to stop doing
some types of surgery and specialise in others.
The businessman said he had signed up more than 300
consultants - probably the largest partnership of doctors in
the UK. The number is growing rapidly. They will share at
least half the profits, with the rest going to the backers.
Massoud Fouladi, the chairman of the British
Ophthalmologists Association and a member of the
partnership's clinical management board, said it was
attracting consultants frustrated about lack of freedom to
innovate. "In my field there has been no alignment between
the people who deliver cataract care and the people who
manage it," he said.
Mr Parsa said consultants who had joined the partnership
covered almost every clinical speciality. Membership would
be expanded to include physiotherapists, nurses,
radiographers, porters and reception staff. He would not
steal staff from the health service. They could fulfil their
NHS contracts and work for the partnership in their spare time.
"We have NHS consultants who, as a matter of principle, have
not previously done private work. They are joining us
because we can add high-quality capacity in their areas.
"Everyone in healthcare wants to have local monopolies. That
applies not only to private sector companies, but also to
NHS acute hospitals. I think that's bad for the market and
for the patients. So we're not telling consultants they must
work exclusively in our hospitals."
The partnership would seek custom from private patients and
the NHS. "We will be able to offer an excellent service at a
reasonable price because we will be operating from
purpose-built facilities which can be made more efficient
than hospitals made from converted manor houses." It would
charge the going rate for NHS patients getting treatment for
free, but perhaps ask more from private patients who could
get add-on benefits such as a private room.
Mr Parsa came to Britain from Iran as a teenager and became
a British citizen 20 years ago. His plan to open 20 health
campuses in the next five years - "maybe double that" -
depend on health ministers fulfilling their commitment to
creating a sustainable private healthcare industry, but Mr
Parsa has no fears on that.
"The foundation of any investment is trust. For any
government to attract continued input from the private
sector, we need to maintain that trust. We are trusting the
government - and so is everybody else."
www.guardian.co.uk/medicine/story/0,11381,1583349,00.html
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